Obama and Reid: Destroying the Economy; Stimulating Trial Lawyers

Over the past few weeks, we’ve been hit with a torrent of negative economic news, portending a prolonged period of stagnation for the foreseeable future. While most recessions end with a period of robust growth and job creation, this recovery has been stymied by odious regulations and a cloud of uncertainty painted dark black with Obama’s anti-business policies. Naturally, the response from Democrats is to impose even more regulations. This time they plan to tap one of their favorite tools; wage controls.

Harry Reid is planning to bring the “Paycheck Fairness Act” (S. 3220) to the floor today. Behind this mellifluous sounding name rests a plethora of onerous paperwork for small businesses, a strong disincentive to hire women, and a Pandora’s box of class action lawsuits designed to enrich the trial lawyers – a group that happens to be prolific donors to the Democrat Party.

At the root of liberalism is the desire to identify contrived vices of the free market and impose arbitrary and deleterious solutions to rectify those supposed problems. In this case, they are looking broadly at a category of people called…women! Yes, they look at the women’s population at large and conclude that they are not paid as much as another broad category…men! That’s a real educated hypothesis that factors in numerous variables.

The reality is that women who choose not to have a family or to continue working full time throughout their career even with a family, earn just as much as men. In fact, there are already laws on the books precluding companies from paying women less for equal work and qualifications; the 1964 Civil Rights Act and the 1963 Equal Pay Act, just to name a couple. Now, obviously when you compare all men to all women with such a broad lens, you will find that women earn less – and that is by choice.

If we are a country that still desires to procreate, we will need mothers to raise families. Again, not all women choose to have children or to stay home with those children, but there will always be a much larger percentage of women doing so than men. Sorry, liberal social engineers, that’s just a fact of life. As such, more woman (and again, by no means a majority of them) choose professions that don’t pay as much as their male counterparts. Also, many mothers will take off time from their careers to stay home full-time or part-time with their kids. This has a cascading effect on upward mobility, experience and qualifications for various jobs. It is a choice that many women are still willing to make in order to raise their families. It doesn’t make them less intelligent, talented, or driven; nonetheless, is will reduce the earning potential of that specific group of women.

The new Democrat law will automatically make all women parties to class action suits against companies for alleged violations of this pay discrimination bill. Lawyers will have unfettered power to challenge the pay checks of any woman working in at any company in any location in the country. Businesses will be forced to prove that they are being paid the same relative to some arbitrary baseline. Just the threat of lawsuits will weigh heavily on business, often dissuading them from hiring women in the first place. It might also serve as an incentive to decrease the wages of men workers. The realm of possibilities is boundless when contemplating such a pernicious government-distortion in the marketplace. Like all government interventions, we will need new programs to rectify the problems created by this act of Congress.

These arbitrary wage requirements will be judged by government bureaucrats and will be fed to their buddies in the trial lawyer community. As the Wall Street Journal reported today, “the bill requires the Equal Employment Opportunity Commission to collect data from employers about how they compensate on the basis of sex, race and national origin”. Don’t count on the lawyers interpreting the data judiciously. They will never look into what’s behind the numbers – and they have no incentive to do so. One can only imagine the nightmare that will ensue as a result of the new paperwork that will invariably flow from these reports.

Democrats have always been extraordinary at identifying the fulcra of the economy (think oil, wages, price mechanisms) and destroying their effectiveness. They are especially good at it when their political surrogates stand to benefit from those interventions.

For those Republicans who are thinking of weakening the Filibuster in the Senate, this bill should serve as an portentous reminder why it must be preserved.